United Business Group Karachi Chairman Ahmed Chinoy has suggested reducing withholding tax on property transactions to revitalize the country’s construction and housing sector.
The head of the representative group for Pakistan’s business community stressed that reviving the housing sector would not only prevent capital flight, but also unlock $100 billion investment potential. For robust economic recovery and growth, he claimed, an early government was necessary.
Describing the construction and housing sector as the backbone of Pakistan’s economy, he said 72 industrial sectors were directly linked to this industry, generating immense employment opportunities and driving economic growth.
According to Chinoy, the government should reduce to 1% withholding tax on property transactions and declare the first property purchase tax-free to promote home ownership. Additionally, he said, the government should eliminate 3% federal excise duty, claiming this was legally unenforceable in provinces and imposes an unnecessary burden.
Supporting Chinoy, UBG patron S.M. Tanveer said the “deemed income” concept has significantly hindered growth in the housing sector and should be removed. He said the government should launch a 10-year fixed-rate mortgage product tied to the 10-year PIB bond yield to make homeownership more affordable.
He further said the government should encourage banks to classify construction as a priority sector to stimulate broader economic development.